Final answer:
Entrepreneurs are typically risk-takers who carefully calculate risks against potential rewards. They often invest their own money into startups, showing faith in their prospects. External investors also seek to reduce risk by personally understanding the business and its leadership.
Step-by-step explanation:
True or False: Entrepreneurs, as a general group, dislike risk taking. This statement is False. Entrepreneurs are often considered risk-takers in the business world. While it is indeed true that any young startup firm comes with its share of risk, entrepreneurs are individuals who, by the nature of their role, are able and willing to organize resources and provide their own investment to produce a good or service in spite of potential risks.
Successful entrepreneurs stand out because they do not shy away from risk; instead, they calculate their risks very carefully and weigh those risks against the potential benefits before investing.
Founders who invest their own money into their startups show a belief in the firm’s prospects. Their investment decisions are often more informed than outsiders because they have the best understanding of the firm's potential and their own commitment to making it work. In this way, angel investors and venture capitalists, who also deal with imperfect information, try to mitigate risk by getting to know the firm's managers and business plan personally, often providing them with advice and guidance.